Jackson Health CEO offers new proposal to keep hospitals open

March 15, 2010|By John Dorschner and Jay Weaver, The Miami Herald

In a major reversal from her first proposal, Jackson Chief Executive Eneida Roldan presented Monday a new restructuring plan with much smaller cuts — eliminating about 650 jobs and keeping both satellite hospitals open.

The new plan depends on several items not yet solidified — including the union agreeing to $30 million in unspecified cuts over the next six months and the University of Miami accepting the delay of $29 million in payments from Jackson. The union leader said afterwards she knew nothing about an agreement — and a UM official immediately disputed the size of the medical school contribution.

Public Health Trust Chairman John Copeland III did not call for a vote on the new proposal, just seeking a general consensus that "we are headed in the right direction'' before the proposal gets passed along to the Miami-Dade Commission, which could consider it Tuesday or deal with it in a special Thursday meeting.

Jackson is anticipating a loss of $229.4 million in fiscal 2010 unless changes are made. The new plan emphasizes cash to pay bills — rather than the overall deficit, which would still remain a huge $130.5 million under the new proposal.

Ten days ago, Roldan proposed a Recovery Plan that included 4,487 job cuts and the closing of Jackson North and Jackson Hospitals, as well as other massive service cuts, based on the assumption of no outside financial help. Those drastic moves would have saved the system $165.4 million — but still left a deficit of $64 million.

Roldan warned at that time — March 5 — that there would be severe pushback from many in the community to her drastic proposal, and indeed there was, particularly about closing North and South.

"This was not a plan to be implemented," Roldan said Monday during the special meeting of the Trust board. "It was a plan to be considered."

Many Trust board members said they liked the new proposal, but the huge change in proposals astounded some at the meeting, including Commissioner Dorrin Rolle.

A vehement opponent of closing the suburban hospitals, Rolle said he liked the sound of the new plan, but he didn't know if he could trust it. "You've got me looking at your numbers like a fat man looks at fried chicken," he told Roldan.

But he wondered aloud how Roldan could say that her first proposal was just a ''presentation, not a real plan'' because he and many others had taken it seriously. "If I missed it, then the whole county missed it. The media reported it. If I was wrong, then everybody else got it wrong too."

After the meeting, Martha Baker, president of Local 1991 of the Service Employees International Union, said she had heard about the $30 million suggestion just before the plan was presented. "They came up with that number. We have no idea what it is."

Earlier, Baker had expressed opposition to her nurses and doctors taking a 5 percent pay cut — a move she said would save Jackson $5 million or $10 million.

William Donelan, chief operating officer of the University of Miami medical school, told the board that he had no idea why the plan was saying UM would present a cash savings of $29.4 million. He said UM had offered to accept a delay of $2 million a month — or about $14 million over the remainder of this fiscal year. And even that figure came with some contingencies that have yet to be worked out. In fact, Jackson is already past due in $52 million in payments to UM.

Trust member Rosy Cancela said she was concerned about taking such a tentative proposal to the county commission. "What are we going to tell them? If these numbers are true, regarding the cash plan, we're covered the next six months. But there is no assurance these numbers are true."

Copeland said he had "a high degree of confidence'' that the core of the plan was sound. But he added: "This plan is a Band-Aid: We can pay the bills through the end of the year," meaning Sept. 30, which concludes Jackson's fiscal year.

The board agreed to focus first on getting cash to pay bills, and the specifics of restructuring to eliminate deficits would have to be hashed out later.

"So we live to fight another day," said Angel Medina, vice chairman of the Trust.

"There is no lessening of the crisis," said board member Ernesto de la Fé. "We just kicked the can down the road." He was concerned the new plan didn't do enough.

Marcos Lapciuc, Trust treasurer, said, "The concern again I have is cash." Despite future projections, Jackson has only about 20 days cash on hand and is behind in paying many of its vendors. He called the new plan "a good start'' but "the situation is still very serious."

"We are not out of the woods," Roldan acknowledged. "We are looking at the immediate problem — the cash position of the hospital."

County Manager George Burgess urged the board to discuss Jackson's broad recovery picture when it went to the county commission. "The discussion can't be limited to cash or people will consider the presentation incomplete."

Roldan also announced she had hired PricewaterhouseCoopers as special consultants for $50,000 for one month, with the possibility of extending it later. Both the Trust and the mayor had urged her to get financial consultants.

PWC partner G. William Luallen said his staff was already in Miami examining Jackson's problems. He said the staff had recently done a major turn-around of Grady Memorial Hospital, an Atlanta public hospital that has also experienced major problems.